The Department of Economic Affairs (DEA) asked the Revenue Department to decide about the increasing import duty on power equipments by keeping in mind the recent demands applied by the domestic power equipment manufacturers. It has been proposed to increase the duty by 10-12% in the upcoming budget 2012 – 2013, but the domestic strong players offered it to be 14%.

Domestic Power Equipment

On the other side, the Power Ministry and Department of Heavy Industries (DHI) are in support of increasing the duty to 14%, DEA are satisfied with the growth till 10-12%. Higher duties may guide the global investors to a wrong direction and this may also increase the cost of generation.

Domestic power equipment manufacturing companies like BHEL and L&T are facing a tough competition, now-a-days are importing power gears from the foreign countries like China. The Reliance Power and Adani Power has placed orders for the cheap equipment from China and other countries and power companies are willing to increase the duty by 14%.

Currently the projects which are less than 1000 MW generation capacity attract 5% import duty.